The impact on employment and immigration law post Brexit

A hot topic for senior HR: how Brexit will affect employment and immigration law. Please find below the highlights from our employment law post Brexit seminar:

On Thursday the 18th of May Morgan McKinley hosted a breakfast seminar on the Impact on Employment and Immigration Law Post Brexit at our London office. The insights below are by our guest speaker - Employment Lawyer Philip Landau

Employment Law Post Brexit

The Government’s Great Repeal Bill will repeal the European Communities Act 1972 and preserve all existing EU derived employment law (whether via statute or cases) into UK law. So Brexit means there will be no immediate change to the many employment law rights that are derived from the EU.

Assuming the UK is not bound to continue to adopt EU derived employment law in the context of any trade deal, the Government of the day, would then be free to repeal or amend existing legislation. The employment tribunals would also be free to interpret case law purely in the UK context, rather than by reference to EU Treaties and Directives or previous case law.

Current EU Based Right and what could change:

Pregnancy and maternity -This is a mix of EU and UK-based rights, but changes seem unlikely as the UK rights already go further than the EU minimum, for example providing 52 weeks’ maternity leave as opposed to the EU minimum of 14 weeks.

Parental leave -This is an EU-based right providing up to 18 weeks’ unpaid parental leave for each child. There is unlikely to be any change, however, as the right is for unpaid leave (thus limiting the uptake), and the age limit was actually increased in 2015 so it can now be taken up to a child’s 18th birthday.

Working time- This is an EU-based right. The UK has its well-known opt-out provisions in relation to the 48-hour working week. A future Government (especially Conservative one) is likely to favour employers having a more flexible approach and so remove this limit altogether. The rules which say that travelling time can count as working time may also be changed.

Holidays and holiday pay– This is an EU-based right. No significant changes are expected to holiday entitlement as the UK already exceeds the EU minimum (providing 5.6 weeks’ holiday as opposed to the EU minimum four weeks). What could be implemented, however, is a reversal of the current entitlement of workers on long-term sick or maternity leave to carry-over unused holiday entitlement to another leave year.

What could also be up for reversal is the requirement that employers must calculate holiday pay to reflect commission and overtime, which is presently subject to an EU ruling.

Collective redundancy consultation – This is an EU-based right.

Consultation periods were reduced in 2013 from 90 to 45 days for redundancies of 100 or more employees. There may be calls to increase the threshold of the number of affected employees, so that collective consultation is only triggered for redundancies of 100-plus rather than 20-plus, although trade unions would be likely to oppose this.

Other collective consultation rights may be subject to some change post-Brexit, to soften the requirements.

TUPE –This is an EU-based right.

There may be changes making it easier to harmonise terms and conditions following a transfer, or the watering-down of information and consultation rights.

Rights on insolvency –This is an EU-based right of employees to claim certain sums from the Secretary of State if their employer becomes insolvent, and is unlikely to change.

Agency workers –This is another EU-based right.

The right of agency workers to the same basic working conditions (for example, pay and annual leave) as equivalent permanent staff after 12 weeks was never warmly received when it was introduced either by the Government or employers, due to over regulation and complexity of the rules in practise. It is a likely candidate for change.

Discrimination- The UK already had protection against sex, race and disability discrimination pre-EU, but these rights have been extended by the EU, and additional protections added, including discrimination on the basis of age, religion, belief and sexual orientation.

It is unthinkable for any government to roll back the discrimination laws, which have become accepted (and expected) practise in the workplace. However, there may be a desire to introduce a cap on discrimination compensation (not currently allowed under EU law), similar to that for unfair dismissal, to deter spurious claims and cut the burden of compensation on employers.

Fixed-term employees- This is an EU-based right protecting fixed-term employees against less favourable treatment in comparison to permanent employees. Those arguing for less ‘red tape’ and a more ‘flexible’ labour market may target these rules.

Part-time workers –This is an EU-based right protecting part-time workers against less favourable treatment in comparison to full-time workers.Those arguing for less ‘red tape’ and a more ‘flexible’ labour market may target these rules, however, some female part-time workers may be able to claim that any less favourable treatment amounted to indirect sex discrimination (since the majority of part-time workers tend to be female).

Data protection- This is an EU-based right

The EU General Data Protection Regulation (GDPR) is due to come into force in May 2018, introducing tougher rules for organisations that handle personal data, and higher penalties. The new regulations take direct legal effect without the need for any national legislation. Businesses will still need to continue preparing for the introduction of the GDPR, as negotiations are unlikely to be complete by May 2018.

The GDPR may still be relevant if the UK severs all ties with Europe, especially in circumstances where a UK organisation processes the personal data of EU citizens.

Bankers bonuses – There is presently a cap for certain bankers which were introduced by EU regulations. The directive imposes a limit that means the bonus cannot be more than the amount of a yearly salary, which can rise to up to two times the salary with shareholder approval.

The Government doesn’t like the cap because it constrains the freedom of the banks to determine pay, which could put them at a disadvantage when hiring top staff compared with banks in the US or the far east. There are concerns also that this has led to banks offering a higher fixed salary, which cannot be clawed back – regardless of how staff perform. The bankers bonus cap could very well be abolished.

Please get in touch if you would like to receive the full presentation or if you have questions.

Soon to follow: highlight video of the impact on Immigration Law post Brexit.

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